The technicals failed to reverse their trend for a correction. The Stochastic continued to slope below the 80% support line and the moving average. The price is also failed to rise over the moving average.
On the fundamental side, could it be that on Wednesday, WMT long positions, were hedging, or just plain playing defense, and selling, or short selling, to protect against a "bad" retail report for June. And then after WMT reported 6% same store sales, (which BTW, should have been higher, considering the very poor May), they covered and/or jumped back in?
Even if this explanation is not valid, what we are witnessing is increased volatility in WMT stock price, due to this underlying concern of WMT's current over valution. A strong bear signal, especially with retail stocks.
Another observation, is that WMT's total growth rate is deaccelerating and approaching the entire retail growth rate average of 9%.(1996 retail growth rate)
When will Walmart concede, and the investors realize, that WMT will not grow at the claimed 15% rates?
The profit takers, I expect are looming, and are looking for an "excuse" to exit. Good Trading. LF |
